Implications of Higher Global Food Prices for Poverty in Low-Income Countries

In many poor countries, the recent
increases in prices of staple foods raise the real incomes
of those selling food, many of whom are relatively poor,
while hurting net food consumers, many of whom are also
relatively poor. The impacts on poverty will certainly be
very diverse, but the average impact on poverty depends upon
the balance between these two effects, and can only be
determined by looking at real-world data. Results using
household data for ten observations on nine low-income
countries show that the short-run impacts of higher staple
food prices on poverty differ considerably by commodity and
by country, but, that poverty increases are much more
frequent, and larger, than poverty reductions. The recent
large increases in food prices appear likely to raise
overall poverty in low income countries substantially.